Telstra denies job cuts in the pipeline

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Telstra Corp Ltd has denied reports that it will axe 8,000 jobs
as part of a planned pre-sale restructure being considered by chief
executive Sol Trujillo.

"Telstra is in the middle of a strategic review but no decisions
have been taken by the company at this point about jobs or anything
else," Telstra spokesperson Warwick Ponder told AAP today.

A research note from investment bank Credit Suisse First Boston
(CSFB) forecast that Telstra could save $1 billion by cutting 8,000
jobs from its 46,000-strong staff by moving to a next-generation
network (NGN).

NGN is a system that streamlines voice, data and multimedia
services onto a single physical network.

"We estimate Telstra could save nearly $1 billion per annum by
undertaking company-wide restructuring of the labour cost base and
implementing an NGN to consolidate its current networks and
processes," CSFB said.

CSFB said Telstra was "burdened with an overly complex network"
and that it was "far from efficient in relation to labour costs
when compared with its closest peers".

Telstra's domestic labour cost base, including outsourcing, was
30 per cent less efficient than its nearest peer, Telecom New
Zealand Ltd, CSFB said.

"With a declining revenue profile, we see Telstra's only
longer-term earnings enhancement opportunity being delivered
through a significant network restructuring program," CSFB
said.

Telstra expects to announce the outcome of the strategic review
in mid-November.

"Anybody making comments about jobs or anything else is purely
speculating at this point and it should be seen in that light," Mr
Ponder said.

"No-one can confirm anything at this point as there have been no
decisions made."

Parliament last month passed bills enabling the federal
government to sell its 51.8 per cent stake in Telstra in single or
several tranches.

CSFB forecast that Telstra could sell some fringe assets,
including its Hong Kong mobile subsidiary CSL for between $1.6
billion and $1.8 billion to offset the costs.

However, it was unlikely Telstra would surrender either its
stake in Foxtel or New Zealand subsidiary TelstraClear, as both
remained strategically significant, CSFB said.